WeChat, the dominant messaging application in China operated by technology giant Tencent, has updated its payments policy that will prevent merchants on the platform from engaging in cryptocurrency-related activities.
The messaging giant updated its Payment Service Protocol on April 30, indicating that merchants using its service shall not, among other things, "either directly or indirectly," be involved in "any initial coin offering activities or operating virtual currency trading."
With the new policy taking effect on May 31, WeChat will terminate its payment services for merchants that are found of violation. However, the policy update did not label crypto-related activities as "illegal transactions," a fact misinterpreted by various Chinese crypto media.
The new policy could have an impact on over-the-counter (OTC) traders in China who are using WeChat Pay as one of the options for transacting Chinese yuan. Exchanges like Huobi and OKEx both offer their platforms for OTC market makers as well as individual users to place bid and ask orders to exchange fiat to crypto, vice versa.
However, it's also important to note that the payment policy update is addressed to merchants on WeChat Pay, referring to account holders who have registered as a merchant or corporate user, as opposed to retail individuals.
That said, the policy update follows WeChat's long-time stance of banning users from using its platform to engage in crypto-related transactions.
Since August last year, WeChat and Alibaba's payment affiliate Ant Financial have both taken efforts to monitor and suspend user accounts that are suspected of being involved in crypto trading.
WeChat image via Shutterstock
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